Employee Dishonesty Claim Over Two Policy Periods Limited to Single Occurrence
Close
 

Employee Dishonesty Claim Over Two Policy Periods Limited to Single Occurrence

The Tennessee Appellate court took on a dispute between an insured and its insurance carrier regarding policy coverage limits under an “Employee Dishonesty” endorsement to a commercial general liability policy for an employee’s embezzlement of $100,000 spanning two policy years. While the policy limits were relatively low, $15,000 per claim/$30,000 aggregate, the stakes were high as the case raised an issue of first impression in Tennessee concerning the stacking of commercial liability policies. The insurer paid $15,000 finding it to be a single occurrence. The trial court found the policy ambiguous and ordered payment of the aggregate amount of $30,000. The Appellate Court found no such ambiguity, determined the policy was not a separate policy but a renewal of the prior year policy, the policy limit for employee dishonesty is $15,000 per occurrence and the claim involved one continuous occurrence over two years. It also ruled the policy prohibits “stacking” of coverage from one policy year to the next. 

Tennessee Clutch and Supply Inc. v. Auto-Owners (Mutual) Insurance Company